$Owner Financing$

[OS2Dude]

NO! If the buyer is insisting on that it is a HUGE RED FLAG. It likely means the buyer can't qualify for a loan and/or they plan to skip out with the boat and feel an individual is less likely to pursue them than a financial institution.

[chubby]

Originally Posted by OS2Dude

NO! If the buyer is insisting on that it is a HUGE RED FLAG. It likely means the buyer can't qualify for a loan and/or they plan to skip out with the boat and feel an individual is less likely to pursue them than a financial institution.

eh..
not sure if this is the same thing

but i paid/negotiated 90% cash and 10% owner "financing"
(ie last 10% would be due within 12 months)



owner was unknown to me..in a foreign land.

i simply wanted to insure that the seller had a vested interest in me succeeding with his boat. and would not vanish the moment the funds posted in his bank account.
(it was my 1st boat...and having access to his knowledge was part of the sale)


i ended up just paying it in full when 1st "payment" was due..

[DShant]

Originally Posted by SuW

Nah. Assets and income in Canada can be converted to USD at the touch of a phone screen.



True enough but try getting a bank loan with them


Most Canadians who spend time in the US have US dollar accounts with their home bank. (They typically moan constantly about the exchange rate, and compare the prices in the two countries, if not three, if you include Mexico.) Many of them keep appreciable assets in US dollar investment accounts as well.


Sure but what does that have to do with getting a bank loan. If you had the cash in the US you would use it to buy a boat. Also the recent conversion of CDN to USD is another reason you might want a loan, so you can wait until the rate returns to 1:1 like it was a few years ago.


Very wealthy? Buying a 20 year-old boat? Possible but very, very unlikely.

I have a few bucks and the last two boats I bought in the US were a 1973 refitted exploration yacht for $2.4 million in 2009 and a 1980 Palmer Johnson for $1 mil in 2019 both almost 40 yrs old at the time

[SuW]

Originally Posted by DShant

I have a few bucks and the last two boats I bought in the US were a 1973 refitted exploration yacht for $2.4 million in 2009 and a 1980 Palmer Johnson for $1 mil in 2019 both almost 40 yrs old at the time

Sigh. Irrelevant. You are not in the same league as the OPs buyer, clearly.

As for a loan, if you have sufficient assets, in a Canadian financial institution, or a house in Canada, they will be happy to lend to you a paltry sum like $50K on a personal line-of-credit or HELOC.

[DShant]

SuW

Your comment was

Very wealthy? Buying a 20 year-old boat? Possible but very, very unlikely.


First of all I don't think the OP mentioned his buyer was very wealthy, but even if I missed it my point was that wealthy people buy old boats.


As for a loan, if you have sufficient assets, in a Canadian financial institution, or a house in Canada, they will be happy to lend to you a paltry sum like $50K on a personal line-of-credit or HELOC.



This is true too of course but misses the point that a buyer might want US financing again to avoid the exchange rate or for other reasons.
Believe me I have tried to get a US bank loan. No SIN, no permanent residence, minimal US income. Doesn't fly On the other hand I have had several seller loans on real estate and boats.

[SuW]

Originally Posted by DShant

SuW
Your comment was
Very wealthy? Buying a 20 year-old boat? Possible but very, very unlikely.
First of all I don't think the OP mentioned his buyer was very wealthy, but even if I missed it my point was that wealthy people buy old boats.
As for a loan, if you have sufficient assets, in a Canadian financial institution, or a house in Canada, they will be happy to lend to you a paltry sum like $50K on a personal line-of-credit or HELOC.
This is true too of course but misses the point that a buyer might want US financing again to avoid the exchange rate or for other reasons.
Believe me I have tried to get a US bank loan. No SIN, no permanent residence, minimal US income. Doesn't fly On the other hand I have had several seller loans on real estate and boats.

Oh come off it. You're just arguing for the sake of it. Go find someone else to play with.

Like I said, any nitpicking about exchange rates and financing is irrelevant.

[Calif.Ted]

Wealthy people don't pay interest on depreciating assets, that's just loss on top of loss.
Not enough interest for the seller to bother with, Catalina 320's sell very quick and easy.

[S/V Illusion]

Originally Posted by Calif.Ted

Wealthy people don't pay interest on depreciating assets, that's just loss on top of loss.
Not enough interest for the seller to bother with, Catalina 320's sell very quick and easy.

If you don’t mind the corollary-
Smart people don’t pay interest on a depreciating asset. Particularly one which, to most people, is a toy.

And no investment strategy changes that.

[AKA-None]

Someone is missing one point
They don’t buy the insurance
You but it and tack the cost onto their payments over the next 12 months

Ok so there is something to think about while not addressing the other issues

[MistyCat]

Originally Posted by SqPeg

I have a friend that wants to sell his 2004 Catalina 320. He has an interested buyer that wants to '"Owner Finanace". Ideas? Tales of intrigue & woe?

If you are a bank and have the usual resources to check credit and act on collections go for it.

[timfells]

Originally Posted by lestersails

It's just gambling.
Upside is where you gain a portion on top of the sale price in interest.
Downside is that you are left with only your down payment and maybe some monthly payments. For a $100,000 boat with 20% down and 10% interest, you would stand to make $25K in interest. You would be risking up to $80K of your money to make $25K, So, if the chance of delinquency is north of 30%, odds are you will lose money. Who the heck knows what the odds are? Just the fact that s/he wants you to be the bank probably increases the likelihood they are a poor credit risk. A line of credit on a home would be reasonable - why can't they do that? Don't own a home? If they don't own a home and don't have $ in the bank and don't have a good enough credit score and income to get a boat loan, their risk is unquantifiable and very likely high. On this page, you can choose one of the services with reliable payments. There are more chances to earn. As others have said, that probably means they can't afford a boat. How would you enforce an insurance requirement? What do you think is the likelihood if the boat is severely damaged that they will pay for the repairs vs. walk away from the boat? And how on earth would you repo the boat if they are delinquent? Hire private eyes to find it and pay some ruffians to forcibly board it and sail it home to you? And that doesn't even count the legal fees you would likely incur. And don't forget the N of 1 problem here. If a business does a hundred of these deals and loses money on some of them, they are still profitable and sleep well at night. You will either have a 100% or a 0% success rate. Can you sleep at night with that?
Bankers make money because they have engineered the legal system in their favor. You have few of those advantages.

I totally agree, the risk far outweighs the potential benefit. Especially if you don't know the buyer and you don't know the real reasons why they want to go that route.